Time: 4pm Tuesday, October 3
Place: 110 South Hall

The Design of Reliable Trust Management Systems for Electronic Trading Communities

Chrysanthos (Chris) Dellarocas
Douglas Drane Career Development Assistant Professor of Information Technology
Sloan School of Management
Massachusetts Institute of Technology
Cambridge, MA 02139
dell@mit.edu

Working Paper URL: http://ccs.mit.edu/dell/trustmgt.pdf


Talk Abstract:

The objective of this talk is to contribute to the development of a rigorous discipline for 
designing trust management mechanisms in online communities. The importance of such a 
discipline is without question: trust is a precondition for the continued existence of any 
market and organization in general. Furthermore, several properties of online interaction 
are challenging the accumulated wisdom of our communities on how to produce trust and 
require the development of new mechanisms and systems. The talk introduces a mathematical 
framework for defining trustworthiness and trust. Based on that framework, it defines the 
related concept of reputation and argues that reputation reporting systems is one of the 
most promising approaches for producing trust in online communities. It also provides a 
critical overview of the current state of the art in that area. Following that, it 
identifies a number of important ways in which unfair buyer and seller behavior can 
compromise the reliability of the current generation of reputation reporting systems. It 
then proposes and analyzes a number of novel "immunization mechanisms" for addressing those 
risks, proves their properties and explains how various parameters of an online marketplace 
microstructure, most notably the anonymity regime and the initial reputation policies for 
new sellers, can influence their effectiveness. Finally, it concludes by discussing the 
implications of the findings for the design of current and future online trading communities 
and identifies some important open issues for future research.